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EnBW adds further units to likely German capacity loss

28 February 2014 15:07
Source:ICIS

German utility EnBW said on Friday it wants to shut down two more hard coal plants with a combined capacity of 250MW. This increases the number of planned plant closures to 44 with a combined capacity of more than 11GW, including five units that need to stay online until summer 2016.

The two combined heat and power generation units HLB 5 and 6, in the south German city of Heilbronn, were commissioned in 1965 and 1966. Each of the units has capacity of 125MW. A third unit at the same site, HLB7, was commissioned in 1985 and will continue to run for the time being, the German utility said.

A formal notification about the planned shut-down to the energy regulator will be made after the board of directors approves it, which is expected to happen in the coming weeks, EnBW added. Following a formal notification, grid regulator Netze BW will assess the system relevancy of the units with the energy regulator making a final call.

The energy regulator recently did not approve of EnBW’s plan to shut down five oil- and hard coal-fired units with combined capacity of 680MW also in south Germany. The plants need to stay online until July 2016.

In contrast to the north of the country, the grid and supply situation in south Germany is considered critical which would worsen with the loss of more conventional plants.

There is also a danger that a new transmission line from east to south Germany will not be constructed in time before the 1.3GW Grafenrheinfeld nuclear unit goes offline at the end of 2015.

EnBW has filed a legal complaint against the ban to shut down its plants, saying it is not sufficiently compensated for having to keep the plants ready for grid stability operations ( see EDEM 20 January 2014 ).

Marginal plant

With ongoing low power prices, hard coal plants are often the marginal plants instead of natural gas plants. This in turn has increased the flexibility requirements of these units as they are more likely to be turned off and on depending on variations in wind and solar power generation. The two hard coal units in Heilbronn were running at about 3,000 full load hours in 2013, an EnBW spokeswoman said on Friday.

While most utilities have invested in increasing the flexibility of their power generation assets, there might be limits to what is an economic investment during times when the wholesale power price is often insufficient to cover full costs.

Of the 42 units which have been announced for shut-down so far, a large number of plants were commissioned before 1970. The planned and unplanned shut-downs have led to speculation that Germany could experience rising power prices from 2018 ( see EDEM 10 February 2014 ).

Earlier this week, the union for the mining, chemical and energy industries IGBCE proposed to bundle hard coal plants in a separate entity outside of their current owners, the utilities. This would include hard coal capacity of 28-30GW of which 75% are operated by Steag, E.ON, RWE, Vattenfall and EnBW. The union said this would help to save jobs. In case of a shut-down of the two EnBW units 80 employees would be affected. Martin Degen